Pre-market market trends

1. On November 5th (Tuesday) pre-market trading in the US stock market, the futures of the three major US stock indexes are all rising. As of press time, Dow Jones futures are up 0.21%, S&P 500 index futures are up 0.30%, and Nasdaq futures are up 0.42%.

2. As of press time, the Germany deguodaxzhishu index rose 0.09%, the UK FTSE 100 index rose 0.15%, the France CAC40 index rose 0.14%, and the Europe Stoxx 50 index rose 0.14%.

3. As of press time, WTI crude oil is up 0.43%, at $71.78 per barrel. Brent crude oil is up 0.41%, at $75.39 per barrel.

Market News

The US election voting day has begun. The media generally believes that the 2024 election is the most closely contested presidential election in recent years. For market participants, key moments to watch include November 6th (Wednesday) 08:30-10:00 Beijing time, when seven swing states will complete their vote counting, and the results in these seven swing states will largely determine the presidential election outcome. Some analysts point out that the result of this presidential election is unlikely to be announced in the usual way on the election day or the next day, but may take a few extra days to be revealed.

Taking a lesson from history: How does the US stock market perform after the election? History shows that the US stock market usually rises after the presidential election, but investors need to be prepared for some short-term fluctuations. Data shows that since 1980, from election day to the end of the presidential election year, the three major US stock indexes have all averaged increases, but investors should not expect the stock market to rise straight after the vote ends. Looking further ahead, election years are generally favorable for the US stock market. Since 1960, the S&P 500 index has risen in almost every election year. The only exceptions were in 2000 and 2008, affected by the bursting of the internet bubble and the financial crisis respectively. In the most recent election cycles, this record looks even better. In the three election years since 2008 - 2012, 2016, 2020 - the benchmark index has risen by at least 10%. A more narrow focus on just the last seven months of election years would yield similar results. However, given the intense situation where the two US election candidates are evenly matched, the results may not be announced before Wednesday morning. Therefore, the market may still need to wait for the evenly balanced congressional election to determine the final vote results for both houses of Congress.

Massive uncertainty! Has the U.S. stock market already hit a "ceiling"? Wall Street veteran Ed Yardeni said that the U.S. stock market may currently be hitting a "ceiling". The long-term investor and president of Yardeni Research believes that due to the strong U.S. economy and worrying outlook for federal debt balances, he thinks there is limited room for the Fed to cut interest rates. In a recent report to clients, he stated that this means further policy easing may not occur until 2025, and the S&P 500 index may remain around 5800 points by the end of this year. This means that the benchmark index will grow by less than 1% in the next two months. He said that post-election U.S. fiscal policy prospects may continue to be concerning, and the Fed may not lower the federal funds rate at all for the rest of this year.

Wall Street renowned bear "surrenders"! Bullish on S&P 500 to rise to 6100 points by the end of the year. Morgan Stanley strategist Wilson said that after the U.S. presidential election ends, investors breathe a sigh of relief, and with the FOMO sentiment at the end of the year kicking in, the S&P 500 index may continue to climb in the final stage of 2024. He stated that by the end of the year, the S&P 500 index may rise to 6000 points, possibly further to a high of 6100 points, but this year "in any case" won't exceed this level, as valuations are too high, and by 2025, growth is unlikely to accelerate, and the P/E ratio is unlikely to expand further.

Goldman Sachs believes: the Fed will still cut interest rates twice this year, and four times in the first half of next year. Goldman's Chief Economist Jan Hatzius still believes that the Fed will achieve its earlier hints of two rate cuts by the end of the year, especially after a weaker-than-expected jobs report last week. He expects this situation to continue in the first half of 2025. Hatzius stated in a report released last Sunday, "We expect the Fed to cut rates four times in the first half of 2025, with final rates dropping to 3.25%-3.5%, but our estimates are about 50 basis points higher than market consensus. In addition, he is unsure whether the Fed will have enough information to change its course before next year.

Individual stock news

Palantir (PLTR.US) third-quarter revenue exceeds expectations and raises full-year performance guidance. The financial report shows that Palantir's third-quarter revenue was $0.726 billion, a 30% year-on-year increase, exceeding market expectations; net income was $0.144 billion, reaching a record high; EPS under non-GAAP is $0.10, higher than market expectations. Third-quarter U.S. commercial business grew 54% year-on-year to $0.179 billion, while U.S. government business grew 40% year-on-year to $0.32 billion. The company highlighted high demand for its AI software in the U.S. Palantir raised its full-year 2024 revenue guidance to about $2.81 billion, higher than the analyst consensus of $2.76 billion. The company also reported significant growth in a closely watched metric: revenue from U.S. commercial business, a key driver of its sales growth. The company expects its U.S. commercial business revenue to grow by over 50% this year, exceeding $0.687 billion. As of writing, Palantir surged over 13% in pre-market trading on Tuesday.

Automotive chip industry still in the 'darkest moment'! NXP Semiconductors (NXPI.US) revenue declined by 5%, performance outlook below expectations. NXP's overall third-quarter revenue decreased by 5.4% to $3.25 billion, slightly lower than the analysts' average estimate of $3.26 billion; adjusted EPS was $3.45, better than the analysts' average expectation of $3.42. The company's largest business segment - automotive chips, saw a 3% year-on-year revenue decline to $1.829 billion, indicating weak demand for automotive chips and continued oversupply. The company expects fourth-quarter revenue to be in the range of $3 billion to $3.2 billion, implying a 6% to 12% year-on-year decline, lower than the analysts' average forecast of $3.36 billion, showing that the company's management expects no substantial signs of recovery in the automotive chip industry until the end of this year; forecasted adjusted EPS for the fourth quarter is $3.33, also lower than the analysts' average expectation of $3.62. As of writing, NXP fell over 5% in pre-market trading on Tuesday.

Super Micro Computer (SMCI.US) faces a new crisis under accounting scandal, rumored that NVIDIA (NVDA.US) is transferring orders to other suppliers. According to sources, NVIDIA is reallocating previous orders to Super Micro Computer to contain the chaos in the AI server industry. NVIDIA intervened to stabilize the supply chain due to the challenges Super Micro Computer poses to the entire industry. Data shows a nearly 45% cumulative drop in Super Micro Computer last week due to Ernst & Young resigning from auditing work due to concerns over the company's governance and transparency. Previously, Super Micro Computer has been facing challenges in financial reporting. If the company fails to submit financial reports by November 20, it faces the risk of delisting once again, having been delisted in 2018 for non-compliant financial filings.

Boeing (BA.US) strike 'tug-of-war' comes to an end! Workers vote for a new contract. Workers at Boeing's U.S. West Coast factories accepted a new contract, ending a seven-week painful strike. The union stated that the new contract includes a 38% salary increase over four years, receiving 59% member support, easing the pressure on Boeing's new CEO, Kelly Ortberg, after two pay raise proposals were rejected in previous weeks. This first strike in 16 years had led to the halt of most Boeing aircraft production and further deepened the financial crisis of the troubled aircraft manufacturer. The International Association of Machinists and Aerospace Workers (IAM) stated that workers can return to manufacturing aircraft from Wednesday, although Boeing warned that due to the long absence from the factory floor, some may have to undergo retraining. Analysts stated that the strike caused Boeing to lose about $0.1 billion in revenue per day, prompting the company to raise $24 billion from investors last week to maintain its investment-grade credit rating.

Vodafone (VOD.US) and Three UK's £15 billion merger case is expected to receive approval from the UK regulatory authority. The merger worth £15 billion between Vodafone and the UK subsidiary of CK Hutchison, Three UK, is expected to be approved, provided that both companies commit to significant upgrades to the UK mobile network. The Competition and Markets Authority (CMA) in the UK also stated that both companies should take measures to protect consumers and prevent price increases. The CMA has temporarily found that implementing a network investment plan will significantly improve the quality of the mobile network post-merger and promote competition among mobile network operators. The antitrust regulatory authority is set to make a final decision on the Vodafone and Three UK merger on December 7. As of the time of writing, Vodafone's pre-market trading on Tuesday saw an increase of over 2%.

Important economic data and events notice

At 23:00 Beijing time, the October ISM Non-Manufacturing PMI in the USA.

Performance forecast.

Wednesday morning: Super Micro Computer (SMCI.US)

Wednesday pre-market: Novo Nordisk (NVO.US), Toyota (TM.US), Honda (HMC.US), Autohome (ATHM.US)